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BODY & MIND INC. (BMMJ)·Q3 2024 Earnings Summary

Executive Summary

  • Revenue grew modestly year over year to $4.41M, with gross profit up slightly; net loss narrowed vs Q3 FY2023 as BaM streamlined operations and focused on Illinois and New Jersey retail .
  • Management emphasized footprint reduction and ROI-driven focus; Lynwood (IL) received a key permit approval to finalize roadworks and service connections, and NJ received its Annual Class 5 Retailer license, advancing the Lawrenceville buildout .
  • Strategic actions included definitive agreements to divest Nevada cultivation/processing for $2.0M, aligning capital and attention to underserved IL/NJ markets; proceeds from Ohio sale fully repaid $7.33M senior secured debt earlier in FY24 .
  • No Q3 FY2024 earnings call transcript was available; Wall Street consensus estimates via S&P Global were not retrievable for BMMJ, so no estimate comparison could be made (no Q3 2024 transcript found) and SPGI tool error (consensus unavailable).

What Went Well and What Went Wrong

What Went Well

  • Revenue and gross profit increased YoY, with Q3 sales of $4,406,132 and gross profit of $1,964,306, reflecting improved performance as retail operations scale .
  • NJ Annual Class 5 Retailer license approval and continued construction progress at Lynwood, IL; management underscored strong location advantages and underserved market dynamics: “We believe the Illinois and New Jersey markets remain underserved…” (CEO) .
  • Strategic optimization: definitive agreement to divest Nevada cultivation/processing and focus capital on higher-return IL/NJ retail launches; COO highlighted disciplined growth plans .

What Went Wrong

  • Operating loss persisted: Q3 net operating loss was $(1,339,038) and net loss from continuing operations was $(2,549,701), reflecting ongoing cost structure and other expenses .
  • Gross margin percentage decreased vs YoY due to increasing labor costs, despite higher gross profit dollars; management cited labor as a driver of margin pressure in MD&A .
  • Legal/regulatory uncertainty: Arkansas dispensary-related litigation around a convertible loan conversion created timing risk (regulator tabled ownership transfer approval), with fair value of the embedded option estimated at $Nil at April 30, 2024 .
  • Liquidity risk: working capital deficit of $5,411,007 and substantial doubt noted regarding going concern over the next year absent additional financing .

Financial Results

Q3 Year-over-Year Comparison

MetricQ3 2023Q3 2024
Revenues ($USD)$4,171,339 $4,406,132
Gross Profit ($USD)$1,926,441 $1,964,306
Net Operating Loss ($USD)$(1,282,554) $(1,339,038)
Net Income (Loss) ($USD)$(3,608,772) $(2,538,190)
EPS (Continuing, Basic & Diluted, $USD)$(0.01) $(0.02)

Sequential Revenue and Net Income (Q1–Q3 FY2024)

MetricQ1 2024Q2 2024Q3 2024
Revenues ($USD)$5.5M $4.4M $4,406,132
Net Income (Loss) ($USD)$0.2M (incl. Ohio sale gain) $(0.2)M $(2,538,190)

Segment Revenue Breakdown (Q3 FY2024)

SegmentQ3 2024 Revenue ($USD)Mix
Retail$4,406,132 100%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY2024/Q3Not providedNot providedMaintained (no formal guidance)
MarginsFY2024/Q3Not providedNot providedMaintained (no formal guidance)
OpEx/Tax/OtherFY2024/Q3Not providedNot providedMaintained (no formal guidance)
Note: BaM did not issue quantitative financial guidance in the Q3 FY2024 materials; operational timelines were updated (Lynwood permit progress; NJ license approval) .

Earnings Call Themes & Trends

No Q3 FY2024 earnings call transcript was available; themes are drawn from press releases and the 10-Q/MD&A.

TopicPrevious Mentions (Q1 & Q2 FY2024)Current Period (Q3 FY2024)Trend
Footprint optimization/divestituresQ1: Sold Ohio dispensary ($8.225M) and repaid $7.33M senior secured debt . Q2: Definitive agreement to divest Nevada cultivation/processing for $2.0M .Continuing focus on core IL/NJ retail; management reiterates ROI focus .Ongoing streamlining toward retail in IL/NJ.
Illinois retail executionMarkham traffic increasing; ownership transfer approval finalized (IDFPR) . Lynwood construction near completion .Lynwood permit approval to finalize roadwork/services; images and status shared .Progressing toward second IL store opening.
New Jersey licensing/buildoutNJ Annual Class 5 Retailer license approved; build permits expected soon .Demolition complete; building permit granted; 4,000+ sq ft site on US-1 corridor .Advancing to tenant improvements; strong location.
Margins/costsQ2 PR: Gross margin improved to 45.7% vs prior periods .MD&A: Gross margin percentage decreased due to higher labor costs despite higher gross profit dollars .Mixed; labor pressure offsets efficiencies.
Legal/regulatoryN/AArkansas CCG litigation delays regulator ownership transfer approval; embedded option FV to $Nil .Heightened uncertainty in AR exposure.
Capital structure/liquidityQ1: Debt fully repaid; share issuance for advisory fees in Q2 .Working capital deficit and going concern risk absent financing .Liquidity risk persists despite debt reduction.

Management Commentary

  • “We continue to execute on our strategy of reducing our footprint and focusing on developing our most valuable assets… modest revenue growth and improvements in bottom line results as we continue to streamline our operations.” — Michael Mills, CEO (Q3 PR) .
  • “Nevada’s wholesale pricing challenges and wholesale tax structure made it difficult to see… sufficient profits over the long term… we feel the Illinois and New Jersey markets continue to be underserved and offer significant opportunities for revenue growth.” — Michael Mills (Q2 PR) .
  • “We are excited to be moving efficiently on our Illinois and New Jersey dispensary construction projects… This is a continuation of our strategy of prioritizing… highest returning projects.” — Michael Mills (Optimization PR) .
  • “We are excited to receive state approval and look forward to bringing a Body and Mind dispensary to New Jersey.” — Michael Mills (NJ license PR) .
  • “We are excited to focus our attention on a smaller subset of opportunities and continue to look for new opportunities that map to our more disciplined growth plans.” — Trip Hoffman, COO (Optimization PR) .

Q&A Highlights

  • No Q3 FY2024 earnings call transcript was available; no analyst Q&A themes or clarifications can be reported for this quarter .

Estimates Context

  • We attempted to retrieve Wall Street consensus estimates via S&P Global (Capital IQ) for BMMJ; the company lacked a CIQ mapping in the SPGI dataset, and consensus data was unavailable. As a result, we cannot provide estimate comparisons or target price consensus for Q3 FY2024 (SPGI error: missing CIQ mapping).

Key Takeaways for Investors

  • Retail-focused operator with all Q3 revenue from retail; IL/JN buildouts are the core growth levers (Markham traffic improving; Lynwood and Lawrenceville progressing) .
  • Sequential revenue stabilized around $4.4M in Q2–Q3 after the Q1 discontinuity from asset sales; net losses widened in Q3 as operating and other expenses weighed .
  • Margin narrative mixed: gross profit dollars higher YoY, but percentage pressured by labor costs; cost control and mix optimization will be critical near term .
  • Strategic capital rotation: Nevada divestiture and Ohio sale freed resources and reduced debt; however, liquidity risk and going concern language underscore the need for further financing or accelerated openings .
  • Regulatory/legal overhang in Arkansas may delay monetization/ownership outcomes; fair value marks reflect current uncertainty (embedded option at $Nil) .
  • Absent formal guidance and with estimates unavailable, focus on operational milestones (Lynwood opening; NJ tenant improvements) as near-term stock catalysts tied to store launch timelines and early comp trends .
  • Medium-term thesis depends on successful IL/NJ scale-up, cost discipline, and resolution of legal matters; watch for 8-K updates and 10-Q disclosures for progress and financing plans .